Make all gifts deductible

On 26 May 2014, Dutch newspaper De Volkskrant published this letter to the editor by Diana van Maasdijk, Head of Philanthropy Advice at ABN AMRO MeesPierson. The philanthropic sector is holding its breath as serious debate goes on about the tax deductibility of gifts to charity. A committee appointed by the government to take a critical look at the tax system sees no evidence that gift allowance contributes to giving for charity – and therefore concludes that it can be abolished. Thanks to a large-scale survey on philanthropy, conducted by Maastricht University and commissioned by ABN AMRO MeesPierson, we now have that evidence.

Out of those polled – individuals with a net worth over 1 million euros – 45 per cent stated they deliberately make use of a tax facility that enables their gifts to be deducted from their taxable income. For instance, of those polled, 68 per cent gifts to charity periodically, as in that case there is no set minimum or maximum for the amount to be gifted.

If the government does abolish gift allowance, philanthropic organisations fear that many donors will quit giving. I doubt that would happen. From personal experience and previous research, I know that people gift for other reasons than fiscal ones. The wish to give back to society is the main motive for donating. Even without any gift allowance, these people will keep on giving. Just smaller amounts.

Gift allowance functions as a catalyst to give more. In my experience, people are more likely to transfer a higher sum to a charity if fiscal benefits apply. The government, for many years the country’s largest donor, has already been cutting back significantly on charity donations in recent years. If it now decides to abolish gift allowance, the already slimmed-down budget for charity will erode even further.

In these current financially trying times, the sector, many donors and myself would prefer to see precisely the opposite: rather than abolish the gift allowance, the government should expand it. So people no longer need to commit long-term to periodic gifts to make the most of their gift allowance. Instead we want a simple regulation making all gifts deductible. Removing all the restrictions that currently apply would really lower the threshold for small and big donors alike to open their purses wider.

For that, we need a government that encourages charity and rewards the generosity of its people. Only then can the philanthropic sector continue its important work - such as researching treatments for illnesses, promoting art and culture, protecting nature and promoting equal rights.